Synopsis

Business firms extend credit, banks extend loans. The focus of this course is credit analysis and lending. It provides an overview of lending principles, covers analytical aspects such as the financial analysis of a firm to determine credit worthiness, provides an overview of policy and legal issues, and looks at special types of credits like consumer loans, real estate loans, corporate loans and international loans. It also covers related topics such as securitisation, problem loans and marketing of loans.

Objectives

On successful completion of this course, students should be able to:

outline the basic aspects of lending and the principles of good lending

explain the rationale for credit scoring models and discuss their development and application

define and discuss credit risk and explain its measurement and control in relation to individuals, businesses and portfolios

outline and discuss the various issues/loan types/techniques/statistics pertaining to consumer, real estate, corporate, small business and international lending

describe the legal framework that governs consumer and real estate lending, and outline legal factors that are specific to bankers

Text and materials required to be purchased or accessed

ALL textbooks and materials available to be purchased can be sourced from USQ's Online Bookshop (unless otherwise stated). (https://bookshop.usq.edu.au/bookweb/subject.cgi?year=2012&sem=06&subject1=FIN2108)

Koch, T & MacDonald, S 2010, Bank management, 7th edn, South Western Cengage Learning, Mason, Ohio.
(Five chapters from Koch & MacDonald will be used in this course. These chapters can be purchased individually from http://www.cengagebrain.com.au. Enter ‘Koch and MacDonald’ in the search box. Under ‘Purchase Options - digital’ choose ‘echapters’. Each chapter costs $7.50. The relevant chapters are 4, 13, 14, 15 and 17. Please note however, that this text is a set text for FIN3109. Depending upon your enrolment plan, it may prove more cost effective to purchase the whole text).)

Assessment details

Your assignment involves assessing the credit worthiness of a business by applying financial techniques including ratio analysis and summarising your results.

Three online quizzes will be conducted during the semester. Further details will be provided on the course Study Desk.

The examination is scheduled to be held in the end-of-semester examination period. Students will be advised of the official examination date for Exam (Parts A and B) after the timetable has been finalised. The total working time for Exam (Parts A and B) is 2 hours.

Important assessment information

Attendance requirements:
If you are an international student in Australia, you are advised to attend all classes at your campus. For all other students, there are no attendance requirements for this course. However, it is the students' responsibility to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration.

Requirements for students to complete each assessment item satisfactorily:
To satisfactorily complete an individual assessment item a student must achieve at least 50% of the marks. (Depending upon the requirements in Statement 4 below, students may not have to satisfactorily complete each assessment item to receive a passing grade in this course.)

Penalties for late submission of required work:
If students submit assignments after the due date without prior approval of the examiner, then a penalty of 5% of the total marks gained by the student for the assignment may apply for each working day late up to ten working days at which time a mark of zero may be recorded.

Requirements for student to be awarded a passing grade in the course:
To be assured of receiving a passing grade a student must achieve at least 50% of the total weighted marks available for the course.

Method used to combine assessment results to attain final grade:
The final grades for students will be assigned on the basis of the aggregate of the weighted marks obtained for each of the summative assessment items in the course.

Examination information:
This is a restricted examination. Candidates are allowed access to specific materials during the examination. The only materials that candidates may use in the restricted examination for this course are: writing materials (non-electronic and free from material which could give the student an unfair advantage in the examination); calculators which cannot hold textual information (students must indicate on their examination paper the make and model of any calculator(s) they use during the examination). Students are not permitted to take mobile telephones, pagers or other electronic means of communication into the examination room.

Examination period when Deferred/Supplementary examinations will be held:
Any Deferred or Supplementary examinations for this course will be held during the next examination period.

University Student Policies:
Students should read the USQ policies: Definitions, Assessment and Student Academic Misconduct to avoid actions which might contravene University policies and practices. These policies can be found at http://policy.usq.edu.au.

Assessment notes

Assignments: (i) The due date for an assignment is the date by which a student must despatch the assignment to the USQ. The onus is on the student to provide proof of the despatch date, if requested by the examiner. (ii) Students must retain a copy of each assignment submitted for assessment. This must be produced within 24 hours if required by the examiner. (iii) In accordance with university policy, the examiner may grant an extension of the due date of an assignment in extenuating circumstances. (v) Assignments are to be submitted in the appropriate assignment folders.

Referencing in assignments: Harvard (AGPS) is the referencing system required in this course. Students should use Harvard (AGPS) style in their assignments to format details of the information sources they have cited in their work. The Harvard (AGPS) style to be used is defined by the USQ Library's referencing guide at http://www.usq.edu.au/library/referencing.

Course weightings: Course weightings of topics should not be interpreted as applying to the number of marks allocated to questions testing those topics in an examination paper. The examination may test material already tested in assignments.

Dishonest actions: (i) Any student who is alleged to have performed a dishonest action relating to any assessment in the course will have a course of action taken against him/her as outlined in the academic regulations. (ii) Pieces of assessment should be the work of individual students. Joint pieces of assessment are not permitted unless written approval has been obtained from the examiner. (iii) Dishonest action in relation to assessment includes: copying or attempting to copy the work of others; use of or attempting to use information prohibited from use in that form of assessment; submitting the work of another as your own; consciously committing acts of plagiarism, that is, taking and using another's thoughts or writings as one's own with intent to deceive, which occurs when paragraphs, sentences, a single sentence or significant parts of a sentence which are copied directly, are not enclosed in quotation marks and appropriately footnoted or referenced in the text; direct quotations are not used, but text is paraphrased or summarised, and the source of the material is not acknowledged by footnoting or other reference in the text.

Deferred work: Students who, for medical, family/personal, or employment-related reasons, are unable to complete an assignment or to sit for an examination at the scheduled time may apply to defer an assessment in a course. Such a request must be accompanied by appropriate supporting documentation. One of the following temporary grades may be awarded: IDS (Incomplete - Deferred Examination); IDM (Incomplete Deferred Make-up); IDB (Incomplete - Both Deferred Examination and Deferred Make-up).